Indian Oil reports drop in quarterly petchem earnings

MOSCOW (MRC) -- Indian Oil Corporation posted a consolidated net loss of Rs 7,782 crore for the quarter ended March 31 on a one-time loss of Rs 11,304.64 crore. It is the refiner's first quarterly loss in more than four years, said Economictimes.

The company had posted a net profit of Rs 6,004.88 crore in the corresponding quarter last year. On the other hand, the revenue of the company declined 3.35 per cent year-on-year (YoY) to Rs 1,42,371.85 crore during the quarter under review.

“The holding company is consistently valuing its inventories at cost or net realizable value (NRV) whichever is lower. For this purpose, NRV is derived based on the actual realisation in the specified subsequent period as per regular practice,” IOCNSE -2.01 % said in a regulatory filing.

It further added that due to the coronavirus pandemic and changes in oil market scenarios there was a significant fall in oil prices which led to write-down in valuation of inventories below cost for the specified period of Rs 6,855.35 crore.

However, on account of the unprecedented situation of lockdown from March 25 in the country precipitated by the outbreak of Covid-19 pandemic and consequent significant decline in demand for petroleum products, as a one-time measure, a longer time period is considered for better estimation of NRV.

As MRC informed earlier, LyondellBasell, the world’s largest licensor of polyolefin technologies, today announced that Indian Oil Corporation Ltd. (IOCL) will use the LyondellBasell Spheripol technology for a new facility. The process technology will be used for a 450 KTA polypropylene plant to be built in Panipat, Haryana State, India.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India.
MRC

MOSCOW (MRC) -- Clariant says that it is doubling the R&D capacity of the Palo Alto, California, facility of the company's catalysts business. The investment includes extending the facility’s high-throughput equipment and expanding the team of technical experts, Clariant says, said Chemweek.

The upgrade is expected to accelerate catalyst discovery and development, and overall time-to-market by 3-4 years, the company says.

“Increasing our capacity allows us to boost both productivity and innovation, which will result in faster development of catalysts for our customers. We are also accelerating our work to advance the state-of-the-art in high-throughput technologies, especially in supporting catalyst scale-up and production,” says Anthony Volpe, head of Clariant’s Palo Alto R&D center.

Clariant’s center at Palo Alto was established in 2009 and focuses exclusively on high-throughput catalyst R&D. The investment enhances the ability to experiment up to 100 times faster than traditional practices, through the addition of hardware, robotics, automated procedures, and specialized software, including machine learning and other artificial intelligence tools, the company says.

As MRC reported earlier, in June 2020, TechnipFMC and Clariant Catalysts entered into a joint development agreement for the demonstration and commercialisation of Clariant’s new state-of-the-art AcryloMax propylene ammoxidation catalyst for the production of acrylonitrile (ACN).

Besides, in May 2020, Clariant’s CATOFIN catalysts was selected by Advanced Global Investment Co. (AGIC), a joint venture between Advanced Petrochemical Company (APC) and SK Group, to build a PDH facility in the Middle East.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.

MRC

MOSCOW (MRC) -- Evonik Industries says it has signed an agreement with Siemens to construct an additional combined cycle gas and steam turbine plant at the Marl, Germany, chemical park, reported Chemweek.

This is an important step toward ending coal-fired generation of electricity and gas throughout Evonik, the company says. Construction will start before the end of summer 2020 and the plant is expected onstream in 2022.

“We intend to cut our absolute greenhouse gas emissions in half by 2025 - that’s Evonik’s key climate goal. The new construction project in this agreement is another important step in that direction,” says Thomas Wessel, board member/sustainability issues at Evonik.

The new power plant will replace a reserve gas-fired power plant at the site and complement the other new power plant that Evonik recently began building at Marl, the company says. “At a total capacity utilization rate of over 90%, the two new plants will generate up to 270 megawatts of electricity, which is enough to power roughly 750,000 households, and up to 660 metric tons of steam per hour,” Evonik says.

The new plant also contributes to Germany’s energy-transition efforts, because its “highly flexible load management can also play a role in balancing input variability from renewable energy sources,” Evonik says.

As MRC informed before, Dow and Evonik have recently entered into an exclusive technology partnership. Together, they plan to bring a unique method for directly synthesizing propylene glycol (PG) from propylene and hydrogen peroxide to market maturity.

We remind that Dow plans to install a new furnace in its steam cracker at Fort Saskatchewan, Alberta, Canada, increasing its ethylene capacity, currently 1.42 million metric tons/year (MMt/y), by 130,000 metric tons/year. Dow will split the cost of the project and the incremental volume equally with an unnamed regional customer, according to CEO Jim Fitterling, who announced the news during the company's fourth-quarter earnings call. Start-up is slated for the first half of 2021.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

Evonik is one of the world leaders in specialty chemicals. The focus on more specialty businesses, customer-oriented innovative prowess and a trustful and performance-oriented corporate culture form the heart of Evonik’s corporate strategy. They are the lever for profitable growth and a sustained increase in the value of the company. Evonik benefits specifically from its customer proximity and leading market positions. Evonik is active in over 100 countries around the world with more than 36,000 employees.
MRC

MOSCOW (MRC) -- Moody’s today published a downgrade of BASF’s long-term and short-term credit ratings from “A2/P-1/review for downgrade” to “A3/P-2/outlook stable”, reported Chemweek.

The reasons for these changes include the economic impact of the COVID-19 pandemic and related uncertainty. “We have taken note of Moody’s decision, and we will strive to come back to a solid A rating at Moody’s. At S&P and Fitch, BASF continues to have a solid A rating. Despite the downgrade by one notch at Moody’s, BASF enjoys good credit ratings, especially compared with competitors in the chemical industry,” BASF says in a statement.

Moody’s says the downgrade reflects BASF's rating ratios that had already been weak for the A2 rating when entering the COVID-19 outbreak, which also limits the potential for improvement in case of a recovery in 2021. “With expected 2021 numbers the company would not be in line with requirements to maintain an A2 rating, such as a Moody's-adjusted EBITDA margin that Moody's expects to reach levels of only around 13% in 2021; high gross leverage with debt/EBITDA of 3.7 times (x) in 2021, even though this is still a considerable improvement from the expected 4.5x in 2020; and the emerging negative free-cash-flow (FCF) profile that Moody's expects will become a feature of BASF as the company embarks on a large capital spending program in Asia and in the area of battery materials coupled with an expectation of continued high dividend payouts. Moody's estimates negative FCF of about EUR1.0 billion in 2020, around €2.0 billion in 2021, and EUR2.8 billion in 2022.”

The peak investments for BASF's planned seventh Verbund site in southern China, on which the company will spend up to USD10 billion until 2030, will occur between 2022 and 2024. Moody's expects that the gap to cover negative FCF will be funded primarily with divestment proceeds. These will largely stem from the IPO proceeds and subsequent disposals of stakes in Wintershall Dea, in which BASF holds a 72.7% stake.

Moody’s says that BASF's liquidity remains solid. The company has taken the decision of holding extra cash in excess of its usual cash balance in the magnitude of EUR2.0-3.0 billion to bolster liquidity in the wake of the COVID-19 outbreak. As the uncertainty from the outbreak recedes and the economy normalizes, BASF will over time reduce its excess cash balance toward levels of EUR2.0 billion and EUR2.5 billion. The company signed additional short-term EUR3.0 billion credit facilities maturing in 2021 and accessed the European commercial paper market. In May, BASF issued EUR2.0 billion of long-term bonds including its first green bond, to refinance short-term debt. “The next bond matures in November 2020 and we expect BASF to repay the EUR1.0-billion bond. The company at its June 2020 AGM ruled out any share buybacks for 2020,” Moody’s says.

The A3 rating also takes into account BASF's exposure to more volatile petrochemicals and intermediates as well as its plastics and monomers businesses, which in 2019 together accounted for about 36% of group sales. These segments were the main contributor to declining earnings in 2019 and the first quarter of 2020 when earnings before interest and tax before special items of these two segments fell by 43% and 35% year on year, respectively. The contribution from more resilient end markets such as agriculture, consumer goods, and health and nutrition has not been sufficient to offset the decline in BASF's commodity business. BASF's exposure to the transportation end market, which includes the automotive sector, ranges between 10% and 20%. Moody's does not assume a recovery to 2019 levels in the worldwide automotive market before 2023, which it says will structurally weigh on BASF.

As MRC informed earlier, an unexpected outage occurred at BASF Total Petrochemical’s joint-venture (JV) olefins unit at Port Arthur, Texas, last Thursday afternoon. The cause of the outage is being investigated, with a compressor shutdown cited as a possible factor, according to a Texas Commission on Environmental Quality filing. Total’s refinery near the olefins plant has also drastically reduced rates. The outage had little effect on Friday’s US spot ethylene market.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of EUR59 billion in 2019.
MRC

MOSCOW (MRC) -- Ineos Styrolution, the global leader in styrenics, said today that Kevin McQuade, who has led the company as CEO since 1 January 2015, has been appointed chairman of Ineos Styrolution, said the company.

Steve Harrington, currently president of global styrene monomer and APAC for Ineos Styrolution, has been appointed CEO, reporting to McQuade.

The change will be effective from 1 July 2020. Harrington has a 30-year career in the chemical industry, the last 19 years working for Ineos in commercial and senior management roles. He has prior experience with ICI and Unilever.

As MRC informed earlier, INEOS is enacting a series of ‘social distancing’ measures in order to protect its employees who play a vital role in the production of essential products. INEOS has announced a series of measures to protect employees and thereby ensure the continued operation of its plants and businesses through the coming weeks and months. As the manufacturer of essential materials that are vital to life, the company is taking immediate action to limit the spread of the virus.

As MRC informed before, in January 2019, INEOS announced Antwerp as the location for its new petrochemical investment. The EUR3 billion investment will be the biggest ever made by INEOS and is first cracker to be built in Europe in 20 years. The investment is a game changer for the chemical sectors and will bring huge benefits to the Belgium and wider European economies.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.
MRC